At a speech in London last night RBA chief Glenn Stevens said he was not worried about Aussie house prices, saying that (on average) they haven't gone anywhere in the last two years.
More interestingly, he remarked that even the so-called boom economies like WA & Qld have seen "indigestion", namely house prices falling......hardly an indication of a bubble.
Stevens also said that the household income to house price ratio was not stretched and within a 10 year range. He hinted at no further interest rate rises. My own bet is that within a year, rates will be falling.
Members of the flat-earth society who advocate that we all sell our IPs and invest in bullion might be disappointed with Stevens statements. They'd rather we bought silver and gold....commodities that are selling at historical all-time highs. Buying bullion does not give us rent, nor does it allow us to negatively gear or obtain other tax breaks.
http://www.abc.net.au/news/stories/2011/03/10/3160478.htm?section=business
My hunch is that the cheapest quartile of Aussie major city residential property will outperform and produce decent capital gains. I cannot say the same for the highest priced quartile of Aussie property. I'm putting my money where my mouth is and am heavily invested in the cheaper beachside suburbs in Melbourne. My IPs are, without exception, older houses on larger redevelopable blocks. Mostly houses that are worth less than $350,000. My IPs won't double in price next year - I'm more than happy with the 15%+ gains they have given me these past few years.
For those who are easily swayed by self-serving panicmongers: Australia is not the USA....people cannot walk away from loans here, as they can in the USA. Which is why the US markets are a mess and we are sitting pretty.
I'm expecting a barrage of denials from the flat earthers .......bring it on boys, you seem to have nothing else to do with your time than to try to talk the market into falling so you can get in on the cheap yourselves. Pretty opportunistic I say.
More interestingly, he remarked that even the so-called boom economies like WA & Qld have seen "indigestion", namely house prices falling......hardly an indication of a bubble.
Stevens also said that the household income to house price ratio was not stretched and within a 10 year range. He hinted at no further interest rate rises. My own bet is that within a year, rates will be falling.
Members of the flat-earth society who advocate that we all sell our IPs and invest in bullion might be disappointed with Stevens statements. They'd rather we bought silver and gold....commodities that are selling at historical all-time highs. Buying bullion does not give us rent, nor does it allow us to negatively gear or obtain other tax breaks.
http://www.abc.net.au/news/stories/2011/03/10/3160478.htm?section=business
My hunch is that the cheapest quartile of Aussie major city residential property will outperform and produce decent capital gains. I cannot say the same for the highest priced quartile of Aussie property. I'm putting my money where my mouth is and am heavily invested in the cheaper beachside suburbs in Melbourne. My IPs are, without exception, older houses on larger redevelopable blocks. Mostly houses that are worth less than $350,000. My IPs won't double in price next year - I'm more than happy with the 15%+ gains they have given me these past few years.
For those who are easily swayed by self-serving panicmongers: Australia is not the USA....people cannot walk away from loans here, as they can in the USA. Which is why the US markets are a mess and we are sitting pretty.
I'm expecting a barrage of denials from the flat earthers .......bring it on boys, you seem to have nothing else to do with your time than to try to talk the market into falling so you can get in on the cheap yourselves. Pretty opportunistic I say.
